Development Dialogue Electricity Beyond the National Grid TIPS, Pretoria, South Africa, 22 February 2018

Transcription

1 Development Dialogue Electricity Beyond the National Grid TIPS, Pretoria, South Africa, 22 February 2018 Gaylor Montmasson-Clair and Bhavna Deonarain Trade & Industrial Policy Strategies (TIPS)

2 Introduction The state of play Matching demand and supply Achieving an affordable access to modern electricity Ensuring resilience and efficiency The role of regional integration Harmonising policies, frameworks and regulations Building common institutions and technical infrastructure Fostering the development of human capabilities Conclusions 2

3 The three dimensions of electricity sustainability Electricity security Electricity equity Environmental sustainability Source: Authors composition, inspired by WEC, 2013 and IEA,

4 Illustration of the energy resources in the SADC region Source: SADRC,

5 Installed capacity and net capacity over the peak demand and reserve requirements for SAPP countries 2006/ / / / / / / / / /2016 Net capacity Installed unoperational capacity Net difference Gross difference Peak demand (including reserves) Source: Authors composition, based on data from SAPP Annual Reports 5

6 2006/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /2015 3,5 Ratios of installed capacity and net capacity over the peak demand and reserve requirements for SAPP countries 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Angola Botswana DRC Lesotho MalawiMozambiqueNamibiaSouth AficaSwaziland Tanzania Zambia Zimbabwe Net capacity/max demand&reserves Installed capacity/max demand&reserves Source: Authors composition, based on data from SAPP Annual Reports 6

7 2003/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /2016 Net imports and exports from 2003/2004 to 2015/2016 for SAPP countries (in GWh) Angola Botswana DRC Lesotho Malawi MozambiqueNamibia Swaziland Tanzania Zambia Zimbabwe Net imports Net exports Net imports South Africa Net exports Source: Authors composition, based on data from SAPP Annual Reports 7

8 Table 1: Committed generation projects planned from in SAPP countries (in MW) Country Total Angola Botswana DRC Lesotho 0 Malawi Mozambique Namibia South Africa Swaziland Tanzania Zambia Zimbabwe Total Source: SAPP,

9 Population without access to electricity in Africa (in volume and share of total population) 9 Source: IEA, 2016

10 Access to electricity in SAPP countries (in % of population) from 1990 to ,0 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0, Source: Authors composition, based on data from World Bank

11 Access to electricity in SAPP countries (in % of rural population) from 1990 to 2012 Use of solid fuels in SAPP countries (in %) 70,0 60,0 50,0 40,0 30,0 20,0 10, ,0 Urban population using solid fuels (in %) Rural population using solid fuels (in %) Population using solid fuels (in %) Source: Authors composition, based on data from the IEA 11

12 Figure 10: Grid electricity prices by end-use sector in selected countries in 2013 Source: IEA, 2014b 12

13 Electricity mix in 2015/2016 for SAPP countries (in MW) Baseload hydropower Nuclear OCGT Distillate Wind Solar CSP Solar PV Landfill Biomass Coal Source: Authors composition, based on data from SAPP Annual Reports 13

14 Electricity mix in SAPP countries in 2015/2016 (in MW and %) Wind; 2492; 4% Distillate; 2709; 4% OCGT; 936; 2% Nuclear; 1860; 3% Solar CSP; 600; 1% Solar PV; 1821; 3% Baseload hydropower; 13000; 21% Distillate; 300; 2% Nuclear; 0; 0% OCGT; 936; 6% Wind; 0; 0% Coal; 2660; 18% Coal; 38381; 62% Baseload hydropower; 11000; 74% SAPP countries SAPP countries, excl. SA Source: Authors composition, based on data from SAPP Annual Reports 14

15 Transmission losses from 2003/2004 to 2015/2016 for SAPP countries (in %) / / / / / / / / / / / / /2016 Source: Authors composition, based on data from SAPP Annual Reports 15

16 CO2 emissions per country (in kg per 2011 PPP USD of GDP) Energy intensity per country (in MJ per 2011 PPP USD of GDP) 1,4 30 1,2 25 1,0 20 COD ZWE MOZ 0,8 ZAF 15 0,6 ZWE TZA LSO 0,4 LSO 10 ZMB ZAFMWI SWZ 0,2 0,0 MWI TZA COD ZMB SWZ NAMMOZ BWA AGO Countries World Low income Lower middle income Upper middle income High income 5 0 BWANAM AGO Countries World Low income Lower middle income Upper middle income High income 16 Source: Authors composition, based on data from the World Bank

17 There are key takeaways when looking back at the three dimensions, i.e. electricity security, electricity equity and environmental sustainability: 1) The region experiences more supply than demand, however there are tremendous imbalances at the national level. In addition, despite more projects planned to increase supply, access to electricity remains a problem, particularly in rural areas 2) The SAPP remains the worst performing power pool on the continent in terms of equity. The region faces a conundrum, with electricity prices too low to make the sector viable but at the same time too high for the population 3) The lack of diversity in the energy mix, resulting in inefficiencies, coupled with high transmission losses, further hampers resilience and environmental sustainability 17

18 Energy regulation is still nascent in the region and lacks independence, capacity and skills Energy policy appears fundamentally inadequate, with long-term planning being largely outdated in time and best practice, and lagging in implementation. Energy policy is not integrated at the regional level: more a collection of national situations than an integrated regional framework. Concerns on the physical security of transmission infrastructure and contract security. The RERA was launched in 2002, with the following objectives: Capacity building and information sharing Facilitation of ESI policy, legislation and regulations Regional regulation cooperation RERA developed regulatory guidelines for cross-border deals While noteworthy, these guidelines have no formal legal status and remain voluntary. Focus on large-scale/long-term transactions, perpetuating and further entrenching the domination of longterm, bilateral transactions 18

19 The SADC has developed numerous regional plans and strategies in the energy space to attempt to remedy the situation 1992 Creation of the SADC 2010 REASAP 2011 Renewable Energy Strategy and Action Plan (RESAP) Common implementation frameworks are furthermore being progressively developed Establishment of the SAPP 2003 RISDP 2012 RIDMP The implementation of such plans, strategies and frameworks remains however problematic. The SADC has limited clout to fast-track implementation and ensure adopted initiatives are adequately resourced and funded Protocol on Energy Energy Cooperation Policy and Strategy 1997 SADC Energy Action Plan 2002 Creation of the RERA 2000 SADC Energy Activity Plan 2015 Revised RISDP SADC Industrialization Strategy and Road Map Approval of SACREEE 19

20 Going forward, the implementation of the plans and frameworks arises as the priority for the region from a policy and regulatory perspective. Necessary regional planning and upward, development-focused harmonisation of the policy frameworks But forego pre-conceived ideas on market structures and tariff methodologies Need for SADC to play a stronger role in effectively securing funding for local-level sustainable energy projects in the region Calls for strengthening of the role and functions of the regional institutions to allow them to have more authority on issues of energy development in region Creation of effective linkages between the energy and industrial development frameworks in the region 20

21 Notable progress has been made in developing the regional electricity infrastructure since the creation of the SAPP in 1995 The role of regional trading mechanisms however remains limited. Furthermore, when turning to the region, countries tend to favour a bilateral approach, striking long-term supply agreements. Total energy traded on the DAM and PDAM from 2009/2010 to 2015/2016 Share of energy traded 2013/ / /2016 On the competitive market Bilaterally Source: SAPP,

22 Excess of demand vs. supply reflecting the issues around electricity security Structural constrains due to infrastructure limitations Demand and supply trends on the competitive market from 2009/2010 to 2015/ Bids submitted and matched on DAM in 2015/2016 (in MWh) Apr May Jun Jul 15 Aug Sep Oct Nov Dec Jan Feb Mar Sale bids Matched bids Buy bids Bids matched but not traded 22 Source: SAPP, 2016 Source: Author s composition, based on data from SAPP 2016 Annual Report

23 Going forward, need to overcome the national deadlocks through regional and local action Pursue planned cross-border projects, with a focus on connecting Angola, Malawi and Tanzania to the regional grid and enhancing key backbone links. Further investigate the role of supergrids, which consist of HVDC transmission networks. Pursue the deepening of the regional mechanisms. The limited but growing role of regional trade (compared to bilateral deals) is promising. Support the local rollout of smart and micro- /mini-grids, particularly in support of rural electrification and local economic development Move towards increased representativity of the regulatory framework to ensure inclusive growth 23

24 The policy mandate to create a regional market for skills and competences is clear Some capacity building and experience sharing is organised at the regional level Most SADC s frameworks, plans and strategies emphasise the need to build data and information databases and repositories Little progress has been made to develop national and regional skills and knowledge. Most capacity building programmes target existing human resources in the sector, higher education institutions and decisionmakers. Very little investment in building the capacity of communities or building a network of community practitioners, especially those engaged in the delivery of decentralised electricity systems. Information and data, on energy like many other topics, remains very scarce and of poor quality in the region. 24

25 Need for a regional cooperative framework to develop the human infrastructure at all levels Development of regional knowledge programmes (harmonisation of regional curricula; mutual recognition of certifications) Establishment of regional educational, training institutions Creation of a regional free movement area Increased action-orientated capacity building to develop new initiatives at the local and regional levels Lesson drawing activities from successful stories and failures (iterative process) Foster data- and information-related initiatives (one-stop information system, platforms to reach communities) Facilitation of enhanced cooperation between R&D institutions on energy issues. Improve mapping and diagnostic tools to answer the needs of populations in terms of energy sustainability 25

26 The road to electricity sustainability in Southern Africa remains long and difficult. The deepening of regional energy integration offers a platform to fast-track progress towards electricity sustainability. Existing initiatives provide the necessary building blocks for regional integration to meaningfully help countries meet their energy challenges. Ultimately, regional integration however remains conditioned on the willingness and engagement of member countries and national institutions as well as robust, inclusive and transparent governance systems. The task at hand is evidently complex and ambitious, but the longterm benefits associated with sustainable development-focused regional integration are at the core of Southern Africa s prosperity. Thank you! Looking forward to your inputs 26

27 Trade & Industrial Policy Strategies Supporting policy development through research and dialogue Gaylor Montmasson-Clair Senior Economist Bhavna Deonarain Researcher